Navigating Immigration Reform: Employer Solutions for Practicable, Effective Reforms

H-1B Visas

Issue | Council-SHRM Proposed Solution | Background

Issue
The H-1B is a temporary visa available to highly educated foreign professionals who hold at least a bachelor's degree or its equivalent and who have an offer to work in a specialty occupation. Countless studies have shown the exponential value these professionals bring to the U.S. workforce, yet arbitrary caps, along with system inefficiencies, make it difficult for U.S. employers to obtain the H-1B visas they need. U.S. growth and innovation will continue to suffer without commonsense reform to this important visa.

 

"Whether in Silicon Valley, Austin, Chicago, Charlotte, Atlanta or anywhere else in the United States, I hear from CEOs that the H-1B visa system is inadequate for today's human capital marketplace … ."

-Robert Greifeld, CEO, NASDAQ OMX, Congressional Testimony, July 26, 2011

 

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Council-SHRM Proposed Solution
U.S. employers best know their business and workforce needs. While Congress should ideally eliminate the arbitrary H-1B visa cap and allow the market to determine our H-1B supply, there are more limited solutions that can improve employer access to this group of professionals including:

  • Providing "dual intent" to U.S. advanced degree graduates who have a job offer by enabling this group to go directly to green card. More visas would be available to those H-1Bs that are truly temporary and do not seek permanent residence.
  • Lifting the 20,000 H-1B cap exemption for U.S. advanced degrees.

Additionally, the many fees associated with an H-1B visa, must be used effectively to help educate and train Americans and to detect and deter fraud without unduly burdening compliant employers. Click here to learn more about costs in the immigration system.

The Power of the H-1B
These are examples of just a few H-1B visa holders who are helping grow our economy and drive innovation:[9]

Partners HealthCare includes the Brigham and Women's Hospital in Boston, where Dr. Bohdan Pohamac, a physician on an H-1B visa, led the team that performed America's first full face transplant, helping a Texas construction worker who was harmed in a power line accident.

Sonu Aggarwal, CEO of Unify2, a communications company in Redmond, WA, came to America ­first as a student at Dartmouth and MIT and subsequently received an H-1B visa. He is an author of the original patent on enterprise instant messaging technology and now runs a company with 34 employees globally and 24 in the United States. Of these 24, 22 are U.S. workers.

Oncologist Hiroto Inaba, an H-1B holder at St. Jude Children's Research Hospital in Memphis, led a study that is the most comprehensive look yet at the long-term lung function of childhood leukemia survivors whose treatment included bone marrow transplantation, which may help physicians identify leukemia patients at increased risk for post-transplant lung problems and adjust treatment to avoid those problems.

Kunal Bahl, a University of Pennsylvania graduate, took a job at Microsoft after graduation. Once his H-1B visa expired, he had to move back to his home country where he founded his start-up company, which now employs about 1,000 people in India – instead of the United States.[10]

 

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Background

H-1B Professionals Are Highly Educated Job Creators and Innovators

H-1B visa holders are highly educated professionals. According to U.S. Citizenship and Immigration Services (USCIS), close to 60 percent of approved H-1Bs have a master's degree, Ph.D. or a professional degree (see Figure 1).[1] The annual flow of H-1Bs is tiny – only approximately 0.06 percent of the U.S. labor force.[2] Further, H-1Bs complement U.S. workers due to their different skill sets and education levels, and they help grow the U.S. workforce.[3] From 2001 to 2010, an additional 183 U.S. jobs were created for every 100 H-1B visas issued.[4] 

H-1B scientists, engineers, doctors, teachers and mathematicians advance American innovation and are critical to many industries that are important to U.S. economic growth, including, but not limited to, biotechnology, education, energy, health care and high tech. In fact, more than half of all patents in 2011 were awarded to groups of foreign inventors, students, postdoctoral fellows and staff researchers who face unnecessary and costly hurdles in obtaining their H-1B visas.[5]

While U.S. employers' top priority is to attract and train American citizens in these fields, the best professionals from around the world will always be needed to fill key jobs, regardless of their place of birth.

 

"We're not talking about big numbers. At Lilly — a top ten global pharma company — we currently employ a grand total of 230 people in the U.S. on H- 1Bs and other temporary visas … that's about 1% of our U.S. employee population. Yet those folks are vitally important. They account for a signi­ficantly larger percentage of our senior level scientifi­c work force … and they make vital contributions that otherwise would not be made."

-John Lechleiter, Chairman, President and Chief Executive Offi­cer, Eli Lilly and Company, "Lifespans and Livelihoods: The Human Dimensions of Medical Innovation" Speech, January 14, 2010

Employers Need Certainty and History Shows the Market Knows Best

Employers need predictability in the H-1B system to plan for their workforce needs. Whether it is the certainty that comes from the ability to immediately access global talent when a contract is won or the reliability that the best and brightest talent will be able to join the employer in the next five to 10 years — around the clock access to talent is critical. Unfortunately, today's H-1B cap does not provide this predictability. The H-1B cap has been reached every fiscal year since 2004, and in certain years, like this year, has been exhausted in just a week, causing random lotteries to determine who is hired and which projects move forward. America's economy deserves better.

Historical H-1B data demonstrates that demand fluctuates with the economy and how arbitrary the caps are. When the cap was at its highest level of 195,000 visas from 2001-2003, usage ranged from a high of 163,600 to under 80,000. Yet in fiscal year 2009, when the cap was at its lowest level of 65,000 visas, USCIS received more than double the total cap in its initial week of H-1B filings, forcing a computer-generated lottery to determine which professionals received H-1B visas. The fiscal year 2013 cap was reached within months, well in advance of the start of the fiscal year, and the fiscal year 2014 cap was reached even sooner – within a week (see Figure 2). At a time when our economy needs innovators, we should provide employers the visas they need to get the job done.

 

H-1B Visas Help America Keep Educated World Talent

While the H-1B visa may be used for temporary work purposes, it is often a critical stepping-stone for an employer to sponsor a talented foreign-born U.S. graduate for legal permanent residence. Under current law, foreign students graduating from U.S. universities are not permitted to have the intent to immigrate and are unable to apply directly for a green card upon graduation. Granting "dual intent" to foreign students who earn a U.S. advanced degree and who have a job offer would allow these students to apply directly for a green card and bypass the H-1B visa.

H-1B Professionals Are Not Less Expensive Substitutes for American Professionals

Hiring an H-1B professional is an expensive process. It can cost over $9,000 in fees to make an H-1B hire and well over an additional $8,000 to transition an H-1B holder to a green card. By law, H-1B workers must receive the same wages, benefits and working conditions as U.S. workers. Employers are required to file a labor condition application to attest they will pay the higher of the actual or prevailing wage to all workers with similar experience and qualifications for the position. H-1Bs are sophisticated, know their market value and are able to change employers if they are not happy with their pay or position. It has been found that areas with higher rates of immigration have higher wages for native workers because immigration leads to greater specialization and productivity.[6] These highly skilled workers are in such demand that Microsoft issued a proposal in 2012 to pay additional fees to guarantee access to an additional 20,000 H-1B visas for those who graduate with a U.S. STEM degree.

 

"Winning the global race for talent is a key part of keeping America competitive, and H-1B visas are one of the tools U.S. employers need to stay ahead of the curve and on the cutting edge."

-Leslie Nicolett, Americas Immigration Program Vendor Manager, Hewlett-Packard Company

Employers Contributing to H-1B Fraud Detection and Prevention

Since 2005, it is estimated that U.S. employers have paid more than $700 million in fees to fund government anti-fraud efforts in relation to H-1B and L-1 visas.[7] All employers are required to pay a $500 anti-fraud fee with each new petition. This money has been used to increase the number of on-site investigations and audits of H-1B employers in recent years. A 2011 Government Accountability Office report states that while there were over 14,000 such visits in fiscal year 2010, only approximately 8 percent of those visits resulted in an adverse action.[8]

Compliant employers do not want employers who break the law utilizing the H-1B program because they take visas away from legitimate users.

H-1Bs are an invaluable asset to U.S. employers and America. Not only are they highly educated, but they have also proven to help create jobs, complement the domestic workforce and innovate for our economy, all contributing to our economic growth. Ideally, a market-based cap should be enacted so as to not limit these important professionals and their work in our country.

Download this information as a PDF.

 

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[1] Government Accountability Of­fice, "H-1B Visa Program," January 2011, http://www.gao.gov/assets/320/314501.pdf.

[2] National Foundation for American Policy, "Analysis: GAO Report Finds H-1B Professionals Are Paid Comparable to Similar U.S. Professionals, Important to Large and Startup Companies," January 2011, http://www.nfap.com/pdf/H1BVisasandtheGAOReportNFAPPolicyBrief-January2011.pdf.

[3] Competitive Enterprise Institute, "H-1B Visas: A Case for Open Immigration of Highly Skilled Foreign Workers," October 2010, http://cei.org/sites/default/files/Alex%20Nowrasteh%20-%20H1-B%20Visas.pdf.

[4] American Enterprise Institute for Public Policy Research and Partnership for a New American Economy, "Immigration and American Jobs," December 2011, http://www.renewoureconomy.org/sites/all/themes/pnae/img/NAE_Im-AmerJobs.pdf.

[5] Partnership for a New American Economy, "Patent Pending," June 2012, http://www.renewoureconomy.org/patent-pending.

[6] Giovanni Peri, "The Effect of Immigrants on U.S. Employment and Productivity," Federal Reserve Bank of San Francisco, August 2010, http://www.frbsf.org/publications/economics/letter/2010/el2010-26.html.

[7] National Foundation for American Policy, "Employers Have Paid Over $3 Billion in Mandatory Fees to Hire Skilled Foreign Nationals in Past Decade," March 2011, http://www.nfap.com/pdf/H1B_Visa_Fees_NFAP_Policy_Brief_March2011.pdf.

[8] Government Accountability Of­ce, "H-1B Visa Program," January 2011, http://www.gao.gov/assets/320/314501.pdf.

[9] Bo Cooper, "H-1B Visas: Designing a Program to Meet the needs of the U.S. Economy and U.S. Workers," March 31, 2011, http://judiciary.house.gov/hearings/pdf/Cooper03312011.pdf.

[10] Rep. Richard Hanna, "Foreign STEM Workers Can Help Rebuild Economy," April 29, 2013, http://www.rollcall.com/news/hanna_foreign_stem_workers_can_help_rebuild_economy-224410-1.html.

 


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As strategic affiliates, the Council for Global Immigration (CFGI) and the Society for Human Resource Management (SHRM) help advance U.S. growth, innovation and job creation by supporting employers and their employees as they navigate the most pressing workforce and talent management issues, which includes reform of the U.S. immigration system. Learn more about ACIP at www.councilforglobalimmigration.org. Learn more about SHRM at www.shrm.org.

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